Nepal is mulling over allowing industries from the non-garments sectors to invest inside the Garment Processing Zone (GPZ) in Simara after not a single garment manufacturer expressed interest to invest there after the Special Economic Zone (SEZ) Authority Nepal in May called for applications from interested garment companies to invest inside the GPZ.

Despite constructing all infrastructure facilities inside the GPZ in close consultation and coordination with garment entrepreneurs, they are now reluctant to invest and are seeking further reduction in the rental charges and also demanding free of cost operation of their factories for the initial couple of years, according to Chandika Bhatta, Executive Director of SEZ Authority Nepal.

The authority will soon publish a second notice calling applications from garment entrepreneurs to invest inside the GPZ, a report in a Kathmandu English-language daily quoted Bhatta as saying. If no applications are received in the second round, investment from other sectors will be sought, said Bhatta. Bhatta accused the Garment Association of Nepal (GAN) of discouraging garment entrepreneurs to invest inside the GPZ. The government came up with the concept of GPZ after the United States extended zero tariff preference for 66 products, including apparels, into its market through the Trade Facilitation and Trade Enforcement Act in February 2016.

The GPZ is offers internal roads, electricity and water supply, sewage system, weighing bridge, waste water treatment plant, petrol pump, banks and insurance service, among other facilities. Garment entrepreneurs, however, said they were informed late regarding completion of necessary infrastructure inside the GPZ. GAN president Chandi Aryal urged the government to review the rental fee as it is higher compared to what neighbouring governments have been levying inside such zones.